1031 exchanges of personal property like aircraft are a bit more complex than exchanges of real estate. Many people wonder whether helicopters are considered like-kind to airplanes under Section 1031. In this article, we are going to talk about exchanging helicopters for airplanes with a 1031 exchange.
Aircraft (a type of tangible depreciable personal property) that are assigned to the same asset General Asset Class (typically 00.21 of Rev. Proc. 87-56) are considered like-class and therefor like-kind for 1031 exchange purposes. General Asset Class 00.21 includes airplanes (except those used in commercial or contract carrying of passengers or freight), and all helicopters.
General Asset Classes
An aircraft may be assigned into one of two asset classes within Rev. Proc. 87-56. Asset class 00.21 generally includes aircraft other than those used in commercial or contract carrying of passengers or freight.
Aircraft placed into asset class 00.21 are assigned a GDS recovery period of 5 years, and an ADS recovery period of 6 years.
Asset class 45.0 generally includes all other aircraft (i.e., those aircraft used in commercial or contract carrying of passengers or freight). Aircraft placed into asset class 45.0 are assigned a GDS recovery period of 7 years, and an ADS recovery period of 12 years.
- 1031 Hotline: If you have questions about helicopters or aircraft exchanges, feel free to call me at 612-643-1031.
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